For Refinery29, the decade-old digital publisher, there’s no better time to be in the business.
“We’ve seen the media world go through a lot of cycles, and this most recent one is the most exciting one for us,” said Justin Stefano, co-founder and CEO of Refinery29. “As confusing as it might be in certain ways, media has never been so broadly and widely distributed, and it’s never been a better time to reach consumers.”
In media circles, Refinery29 is often considered the female counterpoint to Vice, and its advertising rates are the envy of the industry. It does sell banner ads, but has never opened its doors to programmatic.
Branded content and what Stefano described as “solutions,” which include experiential marketing and other elements, take precedence over check-the-box RFPs.
Stefano talked to AdExchanger about Refinery29 and how it sees the media business shaping up at a time when platform distribution is king.
AdExchanger: Refinery29 is a publisher that’s said it puts content on a platform first and figures out monetization second. Elaborate on that.
JUSTIN STEFANO: Seventy percent of the content consumed by our audience is consumed on other platforms outside of websites. It was critical to figure this out.
For us, the primary marketing product we sell is branded content, and that’s something that travels well in the mobile and social world. A lot of the big platforms now have programs that encourage it. Facebook Anthology is an example of this. We’ve had a tremendous amount of success doing it.
BuzzFeed has dealt with agency backlash in its branded content business, from brands that feel their stories aren’t actually going viral. How is Refinery29’s branded content business different from that approach?
We try to focus on proven and consistent formats that work again and again. It’s hard to consistently predict what’s going to go viral. But what you can do is have a deep enough understanding of what’s going to perform above a certain threshold. To get to where you want it to be, viewership- and engagement-wise, is really hard. Those home runs are hard. We’ve had video series where that happens, but it’s difficult to build a business on it.
Refinery29 has always sold direct, never programmatically. Has it been hard to maintain that position?
The reason why brands come to us and want to work with us is because of how well we know our audience and how closely we work with them to drive results.
We solve a big problem for brands, which is relevance with millennial women. When you work with a third party, an ad network or programmatic network, you can’t do that. You just serve banner media on a site and it becomes commoditized.
What are publishers doing wrong right now?
There are a lot of publishers that don’t know their audience well enough. Publishers have seen an enormous amount of growth, and with that growth they haven’t always understood who is coming to their door everyday. That’s one miss.
Publishers are also spreading themselves too thin. Building one brand that matters is hard. Building 10 brands that matter is really hard.
There are certain publishers that haven’t embraced tech the way they need to, especially on the CMS [content management system] and publishing side. Besides not making a big enough investment in tech, it’s waiting to invest. We started investing in video two years ago. That’s given us a head start in building out that business. Often publishers wait versus taking a leadership position and taking risk.
How is Refinery29 thinking about ad blocking?
We haven’t been really affected by it. The majority of what we sell gets around the ad blockers: It’s branded content and custom solutions we build into the site. Long term, we think it will positively impact us because it will push more focus and more budget into solutions that get around the ad blocker.
One more thing about the ad blockers. There’s a lot of really toxic inventory out there that is being delivered to users, and it makes them tune out advertising. It damages publishers and damages advertisers. I hope this ad-blocking issue makes people rethink how they are serving ads – and [makes] marketers think about the platforms they are using to reach customers and being more respectful to users.
What forces will affect which digital media publishers win or lose in the future?
There are a couple of things people have to pay attention to over the next couple years. One, as more media is consumed through platforms, the margins in ad revenue start to look different. When you have different revenue splits with different platforms, the business fundamentals start to change. You have to be really conscious and aware of that shift that’s happening. That’s just the reality. The upside to that is that as the margin shifts, the opportunity for revenue is 10 times and hundreds of times bigger. That’s one of the things we’re focusing on.
And the other?
We are also thinking about building more owned-and-operated experiences. We just launched a product, “This AM,” an app that’s been an amazing success so far. It’s a new direct channel we have with our user, and it’s something we own versus something we borrow.
Is scale a commodity, and engagement the new metric publishers are chasing?
Our belief is that infinite scale at this point is meaningless. Most of our time is [spent] thinking about growing engagement and time spent. We think about engagement time by channel. Each one is unique, and we focus on getting them to stay engaged for longer periods. What matters is content that creates impact and creating relevance with our audience, which is one of the most important generations of people that lived.
What’s changing about how buyers want to buy with you?
For us, the programs are becoming more and more layered. Over the past two years, we’ve grown services significantly. We launched Here and Now, our influencer network, to help brands engage with influencers. Video is a new product we’ve launched. Experiential is growing for us. We did “Rock the Dots” with Disney on National Polka Dot Day, which was a celebration of Minnie Mouse and an interactive, visual experience. Less and less are we responding to pure media RFPs, or brands wanting advertising. They are asking for 360-degree solutions.
What do you think the digital media market will look like a year from now?
A year from now you’re going to see a lot more video. That is going to continue to be a growth area. The movement toward platform distribution is only going to continue to expand. Our belief is that niche communities, passion categories that speak to special interests or ethnicities, are more important than they’ve ever been, so you’re going to see a lot more of that.
Millennial women aren’t a niche, right?
No, but you won’t believe how many people think women are a niche audience. They’re 50% of the population.
Check out previous interviews with The Atlantic, Evolve Media, Forbes, Mic, The New York Times, Purch, The Washington Post and Ziff Davis – and more to come.
This interview has been condensed and edited.
